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Income Tax Appellate Tribunal, “H” BENCH, MUMBAI
Before: SHRI SHAMIM YAHYA & SHRI AMARJIT SINGH
O R D E R
PER SHAMIM YAHYA, Accountant Member:
This appeal by the assessee is directed against order of learned CIT-A dated 21.09.2017 and pertains to assessment year 2006-07.
The grounds for appeal is that the learned CIT-A erred in sustaining the penalty of Rs. 7,83,991/- under section 271(1)(c) of the income tax act.
Brief facts of the case leading to the levy of penalty are that penalty was levied on two counts. One issue was the claim of deprecation on the premises which was let out. Assessee’s submission in this regard was that the said premises was also partly used by the assessee for godown. This was rejected by the assessing officer, and assessee’s appeal against the above was sustained by the learned CIT- A. Another issue was claim of the assessee that it was not liable to taxation under MAT provisions under section 115JA was rejected on the ground that assessee’s case was falling under section 115 JB. Inasmuch as assessee was not situated in a notified Special Economic Zone.
Penalty u/s 271(1)(c) was also levied on the above issues. The learned CIT-A also sustained the penalty on the ground that the claim of the assessee was patently dubious.
Against above order assessee is in appeal before us. We have heard both the counsel and perused the records. As regards the claim of deprecation on which penalty has been levied, we find that assessee’s claim, that assessee was also using the said let out premises as godown has been rejected. This aspect has to be looked from the point of view that the said prices was let out to the assessee’s wife itself. Hence the assessee claim that the said prices was also being partly used for godown purposes cannot be said to be ex facie bogus. In our considered opinion assessee’s conduct in this regard cannot be said to be contumacious warranting levy of penalty.
As regards the levy of penalty on account of tax under section 115 JB under MAT is concerned, we find that assessee’s claim was that it was falling under 115 JA. This claim was also supported by the certificate of the auditors. In this view of the matter assessee’s conduct cannot be said to be contumacious warranting levy of penalty. If the claim was wrong the responsibility was that of the auditor who duly certified the same. Hence it was a mistake on the part of the auditor and the assessee cannot be visited with penalty for the mistake of its consultant.